(Bloomberg) – Stocks in Asia are poised for declines on Wednesday after U.S. stocks fell and government bond yields rose, amid growing unease that an easing of pandemic lockdown measures in China would further inflate the global economy.
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Stock futures in Japan, Taiwan and Singapore fell. The S&P 500 fell 0.4% on weak volumes in a decline led by technology stocks. The benchmark 10-year Treasury yield rose 9 basis points and its Australian counterpart rose 16 basis points in early Asian trade.
The cautious mood dampened investor hopes for a rally in the final week of trading in 2022 to cap a brutal year for financial markets. Global stocks have lost a fifth of their value in what would mean their worst annual decline since 2008. The 10-year Treasury yield is over 3.80%, up from 1.5% at the start of the year, and Bitcoin has held below $17,000 for more than $47,000 after the start of 2022.
Reports that China would drop quarantine requirements for inbound visitors and begin issuing Hong Kong passports and travel permits to mainland residents added to inflation concerns.
“We could get a tipping point from the Federal Reserve later next year where they actually start cutting interest rates, but that’s going to happen if the situation gets a lot worse than it is now,” Matt Maley, chief markets strategist at Miller Tabak + Co., said on Bloomberg TV. “If we just slowly grind down, the Fed will keep rates high even if it stops raising rates in any way.”
China’s reopening boosted prospects for oil, which remained stuck at a three-week high, and came as Russia imposed some restrictions on oil exports to foreign buyers who adhere to a price cap.
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Iron ore rose to its highest level since early August, while copper rose in New York. Gold edged up slightly and traded above $1,800 an ounce.
Important events this week:
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BOJ summary of comments from the 19-20 December, Wednesday
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US initial jobless claims, Thursday
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ECB publishes economic report, Thursday
Some of the key movements in the markets:
stocks
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The Topix index futures were down 0.5% at 7:58 a.m. Tokyo time
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Singapore’s STI index futures fell 0.3%
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Hang Seng futures were unchanged
currencies
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The euro was little changed at $1.0642
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The Japanese yen was little changed at 133.48 per dollar
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The offshore yuan was little changed at 6.9711 per dollar
cryptocurrencies
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Bitcoin was little changed at $16,682.37
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Ether was little changed at $1,210.96
Bind
raw materials
This story was created with the support of Bloomberg Automation.
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